Correlation Between Identiv and CSL
Can any of the company-specific risk be diversified away by investing in both Identiv and CSL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Identiv and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and CSL Limited, you can compare the effects of market volatilities on Identiv and CSL and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Identiv with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and CSL.
Diversification Opportunities for Identiv and CSL
Excellent diversification
The 3 months correlation between Identiv and CSL is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited and Identiv is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Identiv are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of Identiv i.e., Identiv and CSL go up and down completely randomly.
Pair Corralation between Identiv and CSL
Assuming the 90 days trading horizon Identiv is expected to generate 2.32 times more return on investment than CSL. However, Identiv is 2.32 times more volatile than CSL Limited. It trades about 0.23 of its potential returns per unit of risk. CSL Limited is currently generating about -0.02 per unit of risk. If you would invest 322.00 in Identiv on August 28, 2024 and sell it today you would earn a total of 49.00 from holding Identiv or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Identiv vs. CSL Limited
Performance |
| Timeline |
| Identiv |
| CSL Limited |
Identiv and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and CSL
The main advantage of trading using opposite Identiv and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv position performs unexpectedly, CSL can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CSL will offset losses from the drop in CSL's long position.| Identiv vs. Superior Plus Corp | Identiv vs. Origin Agritech | Identiv vs. INTUITIVE SURGICAL | Identiv vs. Volkswagen AG |
| CSL vs. Superior Plus Corp | CSL vs. NMI Holdings | CSL vs. Origin Agritech | CSL vs. SIVERS SEMICONDUCTORS AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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